Analysing a tender request

The first step in developing a tender response is to examine the tender request. You need to decide whether the opportunity is a good fit for your business, and whether or not to invest further time, money and resources into developing a tender competitive response.

How to analyse a tender request

Use the checklist below to analyse tender requests, and decide whether or not to make an official tender response. This is an important decision to make. Developing a tender will cost money and use valuable resources, and abandoning the development of the tender at a later stage can have serious consequences for your business (especially if you are a small business).

Tender analysis checklist

About the tender

What goods or services is the buyer seeking to purchase?
What are the evaluation criteria?
What are the key dates?
What are the submission requirements?
Do any key sections of the tender specification need highlighting for further discussion or clarification?

About the buyer

What are the buyer's key requirements?
Does my business have any existing business relationships with the buyer?
Does the business understand the policy environment that the buyer operates in?

About my business

Is this tender a strategic fit for my business?
What are my business's strengths? What are my competitors' strengths?
Can I demonstrate a track record of previous successful tender delivery?
What is my initial estimation of cost to bid for this tender?
What is our potential profit from winning the tender?
What resources do we require to bid and deliver a winning tender?

Tips for analysing a tender

  • If you can't deliver, don't bid.
  • Don't assume that existing suppliers will automatically win the tender when a contract comes up for renewal.
  • Make sure a contract notice really is a tendering opportunity, and not a request for quotation.
  • Don't take on too many tender opportunities at once. It's best to concentrate on tenders that are most likely to yield results.
  • Check the size of the contract (if available) against your turnover. Sometimes if the contract value is more than 20% of business turnover, that could count against you in the assessment of your tender response.
  • If you can, consider nominating a staff member to look for tender opportunities. Be sure to give them enough time for this important activity.
  • You may find that you can submit a strong tender response, but that actually delivering the tender will only make a small profit or no profit at all. Normally you would discount these types of opportunity. However, if the opportunity fits with your business's long-term strategy and delivering the tender would not cause financial issues for the business, then you should consider submitting a tender response. Known as 'loss leader tendering', this strategy gives you access into a new market (or the chance of building a new business relationship with a new customer).
  • Be aware that taking on the process of a new tender may put a strain on your existing business resources. It is important to ensure that winning new tenders does not affect delivery of your existing contracts.

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